The personal luxury goods market is set to grow as much as 8% globally in 2018, according to a recent report, pushed on by double-digit sales growth in Asia and the accessories and footwear categories worldwide.
Data issued by the Altagamma Worldwide Market Monitor and by a Bain & Co. study has forecast personal luxury goods will fetch revenues of 276 billion euros to 281 billion euros this year, a jump of 6-8%, on 2017.
In October last year, it was first predicted that the market would witness 5% growth for this year.
Expectations for average growth in earnings before interest, taxes, depreciation and amortisation in 2018 are up to 10% compared to the figure released in October, which was 7%.
By category, sales of accessories, jewellery and cosmetic goods will lead this year’s positive performance, witnessing 7%, 7% and 6% growth, respectively.
Shoes sales will also continue to play a major role, kicked on by sneakers, while apparel growth will slow, despite a lift of 4% for the year.
By region, Asia will the most key, up 12% compared to the 10% increase forecast in October. Chinese tourism will bolster sales abroad, however, preferring travel to the US rather than Europe, where the strengthening of the euro negatively impacts tourists’ flow and spending.
North America, which in October was forecast to grow by 4% this year, is now seen expanding by 6%, while Europe, last predicted for a 4% uptick in 2018, is set for 3% growth, hurt by currency conditions and sluggish spending in Germany and the UK. Japan, Latin America and Middle East will see personal luxury goods expand 5%, 3% and 2%, respectively.
Back to China, domestic spend is also set to change, said the report.
“Starting from July, China will reduce a series of import duties for a range of product categories, including apparel, fashion accessories and some categories related to furniture,” said report authors.
“In particular, for these goods, duties will be halved, which will impact their pricing in China.”
Looking further forward, the study predicts that the luxury market could reach 390 billion euros by 2025, registering a 4 to 5% compound annual growth rate.